EU Blasts American Cash for Clunkers. For Starters

Bertel Schmitt
by Bertel Schmitt

The European Commission has scrutinized care packages given to car makers by their governments. The Commissars find those programs highly objectionable. According to Reuters, “U.S. financial aid to carmakers and a number of stimulus packages adopted by other countries to fight the economic slowdown could distort global trade,” a (probably not very) confidential European Commission report says. Here are the EU commission’s main objections:

“The majority of the measures in the stimulus packages affect positively national companies as well as foreign companies and imports. However other parts are aimed at helping national industrial sectors and could be trade-distorting.”

“Sector-specific and firm-specific direct subsidies, such as GM and Chrysler loans in the United States are potentially the most trade distortive.”

The report is the product of a probe carried out by Brussels between March and June into “potentially trade distortive measures conducted by other members of the World Trade Organization.” Note the WTO reference.

The report is unhappy with several countries, notably the United States, China and Russia. The report points fingers at the planned US cash4clunkers program, and criticizes incentives given to consumers to buy eco-friendly cars in Japan.

Reuters, who has a copy of the allegedly confidential report, mentions nothing about Abwrackprämien and bailout monies given by EU members. The report is being handed over to EU governments today for immediate inaction.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href=""> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href=""> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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4 of 13 comments
  • John Horner John Horner on Jun 12, 2009

    The EU is likely to be about as effective at trying to stop nation-based auto company support as the UN is at maintaining world peace.

  • Dwford Dwford on Jun 12, 2009

    Isn't Germany doing a similar deal and Britain about to start the same?? Does the EU know what it's members are doing? Or is it just when the US does something like this that it's a problem?

  • Johnthacker Johnthacker on Jun 13, 2009
    Isn’t Germany doing a similar deal and Britain about to start the same?? Does the EU know what it’s members are doing? Or is it just when the US does something like this that it’s a problem? The US law apparently has a lot more details and loopholes built into it so that people will have incentives to buy Detroit vehicles. For example, apparently if you replace a truck, you have a much lower target if you replace it with another truck or SUV than with a car. And of course throwing rocks in your own harbor because someone else is throwing rocks in his never makes sense anyway.
  • Blindfaith Blindfaith on Jun 13, 2009

    Let's see, do all the other countries supply their workers with medical coverage, retirement and pay for all the research and development of the cars. Many do not even wory about the environment South korea, china. Why do all you folks do not consider these major factors in the cost of manufacturing a non-issue. Most of you probably are not from the US and are just trying to bankrupt the US. The end result of no manufacturing sector in the US